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Technology Stocks : Oak Technology (OAKT)
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To: AreWeThereYet who wrote (4147)9/24/1998 12:01:00 PM
From: slob  Read Replies (2) of 4335
 
Andy, I agree Oakt is a great value play, however!

As I see it management is determined to regain their past glory by getting their Sales back to a respectable level. To do this they are shot-gunning every opportunity that crosses their path. As a potential investor I would much rather see management focus on just one of the available opportunities, even if they fail. Doing this would reduce the burn rate. If Oakt were to concentrate on DVD alone than they could reduce their expenses dramatically. R&D could be as low as $5M/Q and SG&A could be reduced to $2M/Q. These are closer to the multiples that a start-up would run if they were persuing a similar opportunity. If Oakt's expenses were around $7M/Q than they would be profitable today. Profitability alone would get their share price up to Cash value if not book value.

As for Pixel Magic, I just don't see the value. Replacing $3 worth of RAM with a JBIG processor just does not make any sense. The only upside that I can imagine is in the Digital still camera market. It seems to me that all other applications are better served by either a programmable DSP or an MPEG encoder. Obviously on a PC the image compression can be done using the CPU and some software. Sorry I just don't see any value in Pixel Magic what-so-ever. I'm happy to be educated if anyone can present a value Prop. that holds water.

Slob

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